Survey highlights vital importance of North East…

Survey highlights vital importance of North East manufacturing as sector recovers from Covid

New research has highlighted the importance of the manufacturing sector in the North East as the region recovers from the challenges of Covid.

The latest annual survey from manufacturers’ organisation Make UK and accountancy and business advisory firm BDO LLP shows manufacturing accounts for 14% of the region’s output, significantly higher than the national average of 9.6%.

The report analysed the status of industry in the North East over the last 12 months, concluding that it has recovered strongly from the worst stages of the pandemic, with output figures showing it performed better than any other UK region or nation between June 2021 and 2022.

Employment levels in the industry are also up, with the region now supporting 108,000 manufacturing jobs – an increase of 3,000 in a year – which accounts for 9% of the region’s total workforce.

Make UK said the rise has been largely driven by the performance of the pharmaceutical and chemical sectors, which have performed strongly throughout the pandemic and account for over a quarter of the region’s manufacturing output, at 14.8% and 12.7% respectively.

In 2021 the North East accounted for 4% of the UK’s total goods exports, with the region’s dependence on the EU increasing from 56% of goods to 58% annually, significantly above the UK average of 49%. That makes the North East the most dependent English region on the EU as an export market.

The next largest destination for regional goods is Asia & Oceania, accounting for 14% of goods exports, followed by North America which accounts for 13% of goods exports.

Dawn Huntrod, region director for Make UK in the North, said: “Despite the talk of ‘Global Britain’, history shows that geography is always the main determinant of trade. The EU was always going to remain the main destination for manufacturers in the North East who remain dependent on it as a market. As a result, it is vital the Government now takes steps to reset the trading relationship with the bloc and, wherever possible, eases and simplifies trading to boost exports for SMEs in particular.”

Steve Talbot, head of manufacturing at BDO in the North East, added: “Manufacturers across the region support tens of thousands of jobs and make a significant contribution to the local economy.

“The region’s increasing dependence on EU export markets shows that local businesses have done a good job in adapting to new post-Brexit rules, but ongoing Government support may well be required, particularly for firms at the smaller end of the spectrum.

“It’s vitally important for the region’s exporters that good trading relationships with our European neighbours are maintained to ensure that trade remains as frictionless as possible. We also hope to see further progress on free trade deals which could offer new and exciting opportunities for North East businesses.”